WATERFORD – Annual town meeting voters will be asked to approve an approximately $1.2 million budget, making choices that will either help solve the town’s cash flow problem or not.
The meeting gets under way at 9 a.m. Saturday, March 6, in the municipal building on Valley Road. Voters face a 63-article warrant.
The recommended $1,186,000 town budget includes $75,724 for town official salaries, $61,800 for employee health insurance and $45,000 for Fire Department operations, $436,000 for the Highway Department and $132,050 for the transfer station. The town’s share for the Oxford Hills School District and Oxford County government will be determined later.
Selectman Randy Lessard said the town has done a good job keeping the municipal budget at about the same level the last few years, but the county and school budgets continue to rise and a cash flow problem continues to plague the town.
Because of declining revenues, such as automobile excise taxes, state revenue sharing, the embezzlement case from several years ago and past practices of taking money out of the town’s checking account to lower the tax burden, the cash flow problem has had a real impact on the town’s spending, he said. The town’s fiscal year runs from January to December.
“Our road commissioner was unable to spend all of the money allocated to him during last year’s town meeting because there was insufficient funds in our checking account during the warm months,” said Lessard of the problem caused by the difficulty in maintaining a positive checking account during January through August when more money is spent than taken in. “By the time the checking account balance had increased to a level that would have allowed him to do some paving the weather was too cold to lay asphalt.”
Lessard said that in order to maintain a positive balance in the town’s checking account during the first six months of the year, the checking account should start with a balance of about $1 million. The state also recommends that the town have cash reserves equal to one-quarter of its operating budget. “Those reserves do not currently exist,” he said.
“In January of 2009 our balance was closer to $540,000. By March of last year the balance in our checking account was dangerously low,” Lessard explained. “In order to pay our bills on time we authorized the temporary transfer of funds from many of the town’s savings accounts. The transfer of the funds carried us for several more months. By early summer, we were unable to pay the school in full for a couple of months.”
Lessard said to fix the cash flow problem, the town needs to rebuild its checking account balance.
“This will require us to spend less than we take in. In order to do that we need to limit our spending to those things that are truly necessary,” he said.
Because of the need to cut back on spending the board will not recommend some items such as a request to purchase a skid steer and attachments for the transfer station. The Finance Committee has recommended that $25,000 be spent for the purchase.
Lessard said that while the selectmen agree the equipment would make the job at the transfer station easier, they can not recommend approval.
If voters approve the Finance Committee’s recommendation, the board will probably have to wait until late in the year to authorize the expenditure to make sure the school district has been paid and the paving projects are completed, Lessard said.
Voters will also be asked to make a decision about the Avedisian property on Bear Pond that was acquired by the town last year for nonpayment of taxes. Lessard said that by selling the property the town would get a one-time infusion of cash into the checking account. But because the lot is unbuildable and its appraisal is low, Lessard said the town would probably not receive much money in the way of annual tax revenue.
If the town keeps the property, Lessard said it would provide another access point for residents to Bear Pond. The board has recommended the property be kept for another access to Bear Pond for residents.
Other articles voters will act on are:
• $16,530 for the care and maintenance of Waterford parks including the town common, Gage Beach and the Crooked River rest area.
•$176,225 for the maintenance of the transfer station.
•$150,000for town road maintenance.
•$203,000 for winter road maintenance.
•$130,000 for highways and bridges.
• Changing the position of town clerk from elected to appointed.
Looking forward, Lessard said the road commissioner has been talking about the need for a new plow truck next year, estimated to cost about $150,000. Lessard said
the town has traditionally paid for this by borrowing money from the forestry account, but that can’t be done now because the account is needed to cover the town’s cash flow issue.
Although he said there may be some opportunity to increase the amount in this account by harvesting more trees from the town’s woodlot, another option might be to borrow money from a financial institution.
“Either way the town really needs to tighten its belt and make some tough choices regarding what is needed and what can be deferred to a later date,” Lessard said.